Houston billionaire Tilman Fertitta is poised to become one of the biggest players on the Las Vegas Strip with his buyout of casino giant Caesars Entertainment Inc.
And with the deal, he also wrote one of the highest-valued casino transactions in Las Vegas history.
His conglomerate Fertitta Entertainment Inc. reached an agreement to acquire Caesars for $5.7 billion plus the assumption of $11.9 billion in debt, bringing the total transaction value to $17.6 billion. The buyout was announced on 28 May.
Another big deal could be on the way. Billionaire media mogul Barry Diller offered Monday to buy out MGM Resorts International and take the Las Vegas casino giant private.
According to CBRE Capital Advisors, the proposal values MGM at $17.6 billion as well.
As with all buyout offers, there is no guarantee that the deal for MGM will close at the price offered, or at all. So for now at least, Fertitta’s buyout value of Caesars appears to be the second-highest ever among deals involving Las Vegas casinos.
The only one to top that was reached in 2006, when a pair of investment firms acquired Harrah’s Entertainment in a deal then valued at $27.8 billion.
The total value rose to $30.7 billion at the time of closing in 2008 – and the casino company later changed its name to Caesars Entertainment Corp.
“Size, Complexity and Regulatory Barriers”
Today, Reno-based Caesars is the second-largest casino operator on the Strip with eight properties, including Caesars Palace, Harrah’s, Horseshoe Las Vegas, Paris Las Vegas and Flamingo.
Fertitta — currently the U.S. ambassador to Italy — is also the largest shareholder in Wynn Resorts, which owns the Wynn Las Vegas and Encore luxury towers on the Strip.
Truist Securities analysts Barry Jonas and Patrick Keough wrote in a research note that they expect a final timeline of at least 12 months for the Caesars buyout, “given the size, complexity and regulatory hurdles of the deal.”
In their press releases about the purchase, neither Caesars nor Fertitta Entertainment said when the sale is expected to close.
The transaction could be subject to heavy regulatory scrutiny, given Fertitta’s existing ownership in two separate casino operators: Wynn and the Golden Nugget chain.
Additionally, his deal with Caesars includes a “go-shop” period through July 11 that allows the seller to consider other proposals.
Still, Fertitta’s assumption of Caesars’ heavy debt pushes the transaction value into the upper echelons of Las Vegas casino buyout history — a cluster of megadeals that all involved the iconic Caesars Palace and the companies behind it.
Billions in transactions
According to the Las Vegas Review-Journal, the third-highest casino purchase in local history ranked by total transaction value was Eldorado Resort’s acquisition of Caesars Entertainment Corp.
The deal was announced in 2019 and valued at $17.3 billion, including $7.2 billion in cash.
Reno-based Eldorado also dropped its name and adopted Caesars Entertainment Inc.
Meanwhile, the fourth-highest deal announced in 2021 was casino landlord Vici Properties’ acquisition of MGM Resorts’ real estate spinoff.
That deal was valued at $17.2 billion, including the assumption of $5.7 billion in debt.
New York-based Vici significantly expanded its real estate holdings through the deal, which gave it ownership of several hotel-casinos on The Strip leased by MGM, including Mandalay Bay, MGM Grand, Park MGM, Luxor and Excalibur.
Vici itself launched in 2017 as a spinoff from Caesars Entertainment — and the landlord’s portfolio includes Caesars Palace.
Contact Eli Segall at esegall@ theplayerlounge.com or 702-383-0342.
